As we’re sure you’re already aware, your personality and mindset have a lot to do with your success as a trader. Aside from executing a great strategy, optimizing daily work ethics and personality traits can boost a forex trading career – and there are certain traits that are particularly useful when it comes to trading.
These advantageous traits can be developed through years of experience and drive for personal growth. Sure, you still need a reliable, well-executed trading strategy, but there are certain profitable traits which will help to ensure your success as a forex trader. Read on to find out all about them…
The Big 5 Personality Traits
Psychologists believe that there are five personality traits that are responsible for our actions. According to VeryWell.com, these five dimensions of personality can determine a person’s behaviour in certain situations, so awareness of these traits can help forex traders jumpstart personal awareness and growth.
Here is a quick look at the Big 5 Personality Traits, identified through years of research:
- Openness to experience: trait of a person who is creative, adventurous, curious, imaginative or insightful.
- Conscientiousness: trait of a person who is reliable, organized, goal-oriented or thorough.
- Extraversion: trait of a person who is sociable, excited, energetic, talkative or assertive.
- Agreeableness: trait of a person who is helpful, compassionate, cooperative or sympathetic.
- Neuroticism: trait of a person who is anxious, moody, tense or emotionally erratic.
You’ve probably already decided which you think apply to you – through the observations of these traits, most people are able to classify and study their personalities. This can produce better trading performance as knowing your personality enables you to determine whether to avoid or enhance a certain trait.
Conscientiousness might seem like the obvious desirable trait for forex traders, but actually the key is to create a balance between all 5. This will lead to profitable trades, smarter calculations and a well-rounded forex lifestyle (something we all know can be difficult to achieve).
To get to know your main personality traits, take The Big Five Personality Test.
Valuable Traits of Successful Forex Traders
Successful forex traders build a rewarding set of traits that enable long-term positive performance. Through these traits, every decision made stems from an integrated trading plan designed for success. With years of experience in losses and wins, find out what worked for successful forex traders. Here are the unique traits you can apply for your own trading system:
Don’t Be Complacent
Complacency is one of the biggest causes of a static career in forex trading. It usually comes after feeling a great sense of content with your current profit without the drive to optimise. It is important to avoid complacency as it hinders growth and limits the possibility of increasing profit.
From learning new techniques to studying economies, successful forex traders are always adapting and optimising their systems to keep up with the changeable forex market. To give you an example, in Raymond Firetag’s interview with Money Show, he shares the importance of always being a student in forex trading. Despite already being successful, he still devotes time to study his preferred currencies and enhance his trading performance. Which just goes to show that you should always monitor your strategies and strive to be the type of trader that is never complacent.
Fact: all success stories involve overcoming failure. In a forex trading career, setbacks and losses are only temporary if you become smart and diligent about moving past it. In fact, the most common and valuable experiences in forex trading deal with learning from mistakes.
In any job, perseverance is key, and here’s a few examples:
- Brian Acton, ex-Apple and Yahoo, spent years being rejected by Facebook and Twitter, so the software engineer decided to build a cloud-based messaging app called WhatsApp. Today, he is worth 4.1 billion USD.
- J.K. Rowling sent her books sent her books to twelve publishing companies and every one of them rejected her manuscript before she found a publisher. Today the creator of Harry Potter, is one of the UK’s richest women, with the Harry Potter series now worth $15 billion.
- Thomas Edison experienced failure 999 times before he successfully invented the lamp – and was he put off? No. Instead, he saw it this way: “I have not failed. I’ve just found 1,000 ways that won’t work.”
Being cautious in nature is a beneficial trait in a forex trading environment. Despite how profitable your current system is, it is always better to leave room for risk control. To be a successful forex trader, you need to set realistic expectations and only risk the amount of capital you are willing to lose.
Successful traders and smart investors always put in capital with room for caution. The father of value investing, Benjamin Graham, expresses the importance of always invest with a margin of safety. His principle is a good trait to practice because it offers better results and minimizes liabilities for each trade. This practice makes way for damage control due to sudden market changes – having a margin of safety is a trader’s protection if the trade does not do well.
Investigate & Analyse
The key to becoming a successful forex trader is to be investigative and analytic of every market move. This means to spend as much time on education or research as following your trade. Be systematic in your daily analysis and check all the facts and figures. It is important to be knowledgeable about what you are trading.
Be investigative and analytic to refine your knowledge and skills in management as well as execution of a trade. Take a tip from Lex Van Dam, who set up his own trading academy to share his advice on trading smarter and building intellectual capital. His advice is that traders should always investigate and experiment different scenarios before trading.
Successful forex traders have the ability to stay consistent in today’s volatile forex markets. With so many aspects of trading to think about, consistency is key. First put in the time and educate yourself in the type of forex trading strategy that works for you – and once you acquire your preferred methodology, stick with it.
To become a proficient forex trader, consistency in strategy and trading performance will eventually lead to better profit to loss ratio and a more defined edge. Rimantas Petrauskas of EA Coder talks about consistency as one of his top 3 trading habits in Forexreferral.com. Petrauskas shares his story on how sticking with his unchanged strategy allowed him to recover losses, compared to when he tried to modify his strategy with new trading rules. For better long-term profitability, remain persistent with your trading strategy despite any sudden setbacks. After testing a solid trading system, stay consistent and avoid improvising.
Forex trading is not a quick and easy road to profit. If there is one common trait that successful forex traders have, it is patience. By setting realistic expectations from your strategy, you can make use of patience and discipline when waiting for indications or for better market conditions.
“My strength is I rise every time I fall, and I only keep moving forward. Perhaps I watched too many Rocky movies as a kid, but it’s served me well.” – Chris Capre, Writer of Trading Price Action and founder of 2nd Skies Forex
Patience and discipline are difficult traits to acquire because it relies on mental strength and determination. According to Chris Capre, patience is one of his best habits, especially when it came to facing difficulty when trading. He did not believe in making quick profits and took his time to learn when to get in or get out of a trade. Without any background in finance or economics, Chris relied on his discipline and diligence to go through obstacles to achieve success.
Habits & Traits for Successful Trading
“Profitable traders are an elite group of individuals who have learned through solid education and experience what it takes to make money in the currency markets.” – Sam Evans, Trading Academy
With time and hard work, there is great opportunity for anyone to become one of the successful forex traders in the industry. With good forex education and a goal-oriented outlook, make sure to practice good habits that lead to beneficial traits. You can boost career growth, add value to your skills and optimize trading performance.
This Trader Lifestyle article was provided by Titan FX. Learn more about the trading lifestyle at https://titanfx.com